Hyundai targets Caprice owners

Hyundai's prestige Genesis brand will launch in Australia from early next year with the release of the G70 model, and Hyundai Australia COO Scott Grant has told Aussie journalists that there's an opening for the new sedan to gain a foothold in the growing market for prestige cars.

"What will make it different for us is that we, in some ways being the freshest and newest brand in that market, have an opportunity to appeal to people in a perhaps less pretentious way than some of the existing brands," Grant said during the global launch of the G70 (pictured) in Korea last week.

"Our research has indicated that there are a number of consumers who have the financial capability, the wherewithal and the interest to own a luxury motor car – potentially previous owners of Fairlane, Caprice – those kind of what you might call 'near-luxury' products. It will be an initial target of opportunity for us."

That presumes that current owners of Caprice – shortly to die when Holden closes the doors of its local vehicle assembly plant at Elizabeth next month – can be talked into buying a car that's physically smaller than even Holden's VF II Commodore, let alone the long-wheelbase Caprice.

But Grant offers an interesting perspective there. Private buyers of new Caprices are pragmatic enough to buy on the strength of packaging and running costs rather than the cachet of a prestige brand from Europe. The problem is that there aren't all that many buyers of new Caprices… and how many of even those few are strictly private buyers, for that matter?

Vacuum left by Caprice
In the past, Hyundai has made no secret of the degree of difficulty picking up conquest sales from established prestige brands – particularly the German brands – and its current 'Hyundai Genesis', which will be relaunched with the prestige brand as the 'Genesis G80' next year, has made almost no inroads in the Australian prestige market since its introduction here at the end of 2014. For the year to date, Hyundai has sold just 99 units of the Genesis, versus 454 units of the Caprice that Holden will discontinue from next month.

Still, a new brand must start somewhere, and Caprice vacating the market does provide a slither of hope for the G80 – and possibly the G70 too, once it arrives here.

Grant believes that now is a good time for a new prestige brand to enter the Australian market, which is in a protracted growth phase.

"We see the opportunity... that this segment of the market has been gaining in its size and popularity and its variety over a number of years, through a number of existing brands that have both expanded their product range – as well as... some [new] entrants... Infiniti and the like," he said.

"So we think that market is there [and] will continue to grow... Any growing market opportunity, there is the initial opportunity to launch and take a small slice of that. What I mean is it's easier to launch a brand in a growing market and take a piece of it, rather than to launch a brand into a declining market place and try to get a piece.

"So that market is growing in Australia – luxury cars generally and performance cars specifically – and we think we can get a piece of that growth in time, even though we are a late entrant to that opportunity."

Infiniti an example... of sorts
Against the unassailable German brands (Audi, BMW and Mercedes-Benz), even other established prestige brands struggle (the likes of Jaguar Land Rover, Lexus and Volvo). But in a series of record markets over the past several years, there have been signs of life from some of those also-rans. Proportionally, Land Rover's rate of growth is on par with Audi's over the past five years and Jaguar's sales have essentially doubled over the last 18 months. But for every Land Rover there's an Infiniti, which has barely got off the floor in the five years it has been selling cars in this country. Scott Grant doesn't want Genesis to go through the same experience.

"A couple of things to put on the table there is that I think our product will be stronger – and I'm not trying to make a broad accusation about the benefit or otherwise of Infiniti, but I think we've got a terrific product range. I think we've got that proven to some extent with the first iteration of Genesis... now the G80, and what you're seeing now with the G70.

"I think our company has a track record of being able to build these motor cars very successfully, so I think we'll have a better product – and in some ways being a fast follower over time is more our approach."

Asked about other parallels with Infiniti, Grant was fairly blunt.

"We have made some observations about their launch plan, their distribution approach, their marketing approach – and we'll be looking to improve on that."

Affordable pricing will naturally be the key marketing advantage Genesis has to offer when it launches in Australia.

"We think we won't command any sort of price premium for some time, if ever, as a fast follower and as a brand that's yet to really prove its credentials," says Grant. "We've got to be realistic about the quality of the competition in this market, and we've got to be realistic about the potential for us to be any sort of a player.

"It will take time and it will be on a limited basis, and we'll be taking our steps slowly but surely."

Never mind the sales, judge the customer experience
Grant set out to manage expectations, telling the journalists interviewing him that he doesn't want the success of the G70 to be judged on the strength of sales alone.

"Our success factors are not based on sales volume, which you might find very unusual for Hyundai, but that's not our approach with this brand at all. Success will be measured by the establishment of the brand and the quality of the sales and ownership experience.

"There are no sales targets [for G70]."

Grant foresees different strategies and tactics to embed the brand in the public perception of the prestige automotive market. These include 'digitisation' – online simulations to make visiting the showroom 'superfluous' – and work/home customer service experience for more convenience, to name but a couple of ideas floating around Hyundai Australia's corporate HQ in Sydney.

"We don't think that customers for the most part are going to go to dealerships in this end of the market, and we'll be encouraging, through our dealer body... to go to customers....

"We don't think that foot traffic in the usual kind of measures on a Saturday afternoon is what this business is about.

"Our philosophy is going to be based a little bit, as you see in some other sectors, around the concierge-type operation, where someone is empowered to look after you in all aspects...

Hyundai Australia is considering bringing Genesis Club, a North American innovation, to Australia, says Grant.

"It's one of the considerations, it hasn't been finally approved.

"In the next month or so… then we'll be able to confirm exactly the path in Australia, but we're definitely studying that concierge, convenience-type system, and the Genesis Club-type perspective."